MINUTES
BOARD OF FINANCE
FEBRUARY 21, 2006
A REGULAR MEETING of the Board of Finance was held on Tuesday, February 21, 2006 in the Council Chambers.
Those in attendance included Mayor Ryan J. Bingham, members of the Board of Finance Daniel Farley, Bruce Cornish, Mark B. Bushka, and James Zeller, Corp. Counsel Albert Vasko, Comptroller Alice Proulx, and Superintendent of Streets Robert Lizotte. Board of Finance members. Joseph Nader and James Nichol were absent.
Mayor Bingham called the meeting to order at 4:05 p.m.
MINUTES #010
On a motion by Mr. Cornish, seconded by Mr. Farley, the board with the exception of Mr. Bushka who abstained, voted to accept the minutes of the regular meeting held January 17, 2006.
OPEN TO THE PUBLIC #030
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to open the meeting to the public. There was no public participation.
SUPERIOR OFFICE SYSTEMS #040
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to purchase a Lanier Advocate V Recorder, four microphones, stands, and cables along with two transcribers from Superior Office Systems for $4,196.00 from Contingency, to be used by City Council and Planning & Zoning.
ANNUAL AUDIT #070
Bill Sawicki, from Sawicki & Lombardozzi, LLC, gave a presentation on the city’s annual audit for year ending 2004-05.
Mr. Sawicki stated that the financial statement was an unqualified, clean opinion, which means it’s fairly presented in accordance with accounting standards as well as the Government Auditing Standards issued by the Comptroller General of the United States. There were no material misstatements, and the numbers fairly represented the different funds, business activity, trust funds, etc. The Management Discussion and Analysis, prepared by Comptroller Alice Proulx, are her observation on the city’s results in financial positions for the year. It was mandated by the Governmental Accounting Standards when the municipalities around the country converted to the GASB34 format, which put the onus back on the financial management entity by requiring them to disclose different highlights about
their budgets.
Mr. Sawicki stated that the city’s assets totaled roughly $156 million. This includes the net of depreciation of the buildings, land, improvements, machinery, and infrastructure. The reflection of these assets on the city’s books is probably the biggest change in reporting in the past few years.
Liabilities, including accounts payable, deferred revenue, other liabilities, and non-current liabilities total almost $75 million.
Page 7 shows the city’s excess of revenues of $1.6 million added to last year’s fund balance, totaling a fund balance of $7.5 million as of June 30, 2005.
Page 12 shows the income and expense side of the pension fund. It shows a net increase of $3.9 million totaling $51.6 million in pension assets.
The city is required by the Office of Management and Budget and the Connecticut State Single Audit Act to have a Federal and a State Single Audit Report because the city expended more than a half million dollars in federal money and more than $100,000.00 in state derived money. It requires the auditors to review certain programs based on dollar levels and risk assessments which they have to calculate. The programs they use are supplied by either the state or the Office of Management & Budget. The auditors reported one finding on a state program which they were required to comment on and include within their report. The finding was that the School Readiness and Child Care Program didn’t have a contract in place with their vendor. They do have a contract in place for the current
year.
The auditor’s Management Letter consisted of four items which they felt should be brought to the city’s attention:
1) an untimely deposit of a grant check at the Senior Center.
2) inconsistencies at the Board of Education in invoice approvals.
3) no policy on hand on how to administer school activity funds.
4) liability for retirees at year-end has to be computed and recorded.
Mr. Cornish inquired whether the bond debt for Torringford was included in this report.
Ms. Proulx said no, it would be included in next year’s audit.
Mr. Farley asked Mr. Sawicki to explain custodial credit risk.
Mr. Sawicki explained that some municipalities were less then prudent on where they placed their funds. The profession, through the Standards Board, is trying to address that by stating that some of a municipality’s funds are covered by FDIC and others are covered by a State of Connecticut lateral pool and the rest of it is uncovered from various protection. The auditors suggest that municipalities talk to member banks to make sure they are as protected as possible. There are products, services or programs in various financial institutions that can offer additional help to shelter daily balances. The city has gone through a centralized cash system and has shrunk the bank accounts considerably. Administratively, we don’t have the burden of reconciling that many accounts, and we
do have credit risk because it’s all in one spot.
Mayor Bingham and the board thanked Mr. Sawicki for his presentation.
REPAIR TRUCK #8: #1090
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to authorize the re-allocation of prior year funds to repair Truck #8.
Ms. Proulx explained that the funds were going to be used for something other than what they were originally set aside for, which was for rental of equipment. Whenever this occurs, it has to be approved by both, the City Council and the Board of Finance.
MODIFY TRUCK #9: #1180
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to authorize $400.00 from the Vehicle Replacement Contingency Account to modify Truck #9.
MUNICIPAL CONSORTIUM FOR FISCAL RESPONSIBILITY #1200
The board heard a presentation from Michael Guarco, Chairman of the Board of Finance from Granby, CT., in regard to fiscal responsibility. He noted that the coalition was an informal group of local officials supported by a number of regional and statewide membership organizations, organized to enhance lines of communication at the Capitol in order to ease burdens such as: 1) unfunded mandates, 2) prevailing wages and 3) binding arbitration. The consortium is making the same presentation before City Councils, Boards of Selectmen, and Boards of Education in hopes of getting their support and endorsement.
Mr. Cornish asked if the consortium had a tracking system in place to notify towns in the event they were need to testify on upcoming legislative issues.
Mr. Guarco stated that they basically communicate through e-mail because it’s simple and inexpensive.
Mr. Zeller asked Mr. Guarco if he had already appeared before the Torrington Board of Education.
Mr. Guarco said no, that he tends to work through the finance and municipal side of the city first, then works his way to the Board of Education.
Mr. Cornish made a motion to endorse the Connecticut Municipal Consortium by the Torrington Board of Finance. Mr. Zeller seconded the motion.
Mr. Cornish noted that the consortium’s agenda was consistent with that of CCM’s. He supported the effort of this group to speak with one voice in order to change things on the state level.
VOTE #2235
The vote was unanimous.
Mayor Bingham and the board thanked Mr. Guarco, Jr. for his presentation.
WRIGHT-PIERCE #2250
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to authorize the payment of $6,020.52 from Sanitary Sewer Capital Improvement Fund #490 to Wright-Pierce for work performed through12/9/05 on the South Main Street Sanitary Sewer Evaluation.
ANN FRAUENHOFER #2270
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to authorize the payment of $650.00 from Contingency to Ann Frauenhofer for the repair of her sidewalk.
MURDOCK CLAIM MGMT CO. #2340
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to authorize the payment of $1,471.32 from Contingency to Murdock Claim Management Company F/B/O The Hanover Insurance Company for the City’s deductible in the Williams matter.
TRANSFERS #2350
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to authorize the transfer requests from Comptroller.
The board inquired about city hall maintenance, tires, and programs community. Ms. Proulx answered their questions.
PAINTING OF LADDER II #2410
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to authorize the use of approximately $16,500.00 from the Vehicle Replacement Contingency Account for the painting of Ladder II.
BUS: MAYOR & MEMBERS #2630
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to consider business presented by Mayor Bingham and members of the Board of Finance.
Mayor Bingham and the board members welcomed Mark Bushka to the board.
Mr. Farley said he attempted to talk with Dick Friday in regard to the custodial credit risk.
Ms. Proulx said Mr. Friday was in the process of obtaining information from the bank so we would have more knowledge on what is collateralized and/or insured and she would continue to research the matter further as well.
Mr. Farley said Mr. Sawicki noted that the city had $24 million unsecured versus $2.5 million secured, and asked if Mr. Friday would look into whether or not we could insure our other deposits.
Mr. Cornish requested that he become more involved with the status of the Vehicle Replacement Plan in order to have some knowledge base for their transfers from the contingency fund. He said “I would like to revisit the plan, get a little more detail on what is in the plan, and where we are with purchasing and rotating equipment the way the plan was originally envisioned.”
Mayor Bingham informed the board that he had reinstituted the Apparatus Advisory Committee and they will try to find out exactly what happened to the Vehicle Replacement Plan. Board of Public Safety Commissioner James Potter is the Chairman of the Committee. Mayor Bingham said he could see if Mr. Potter would be able to attend next month’s Board of Finance meeting to give them an update. He stated that the Board of Finance could also attend the next Apparatus Advisory Committee meeting if they desired.
Mr. Cornish stated that the board was given one presentation on Vehicle Replacement. He would be happy to get notice of the next meeting of the Apparatus Advisory Committee so that he could attend.
Mr. Cornish added that the plan wasn’t really a concern because we manage our money pretty well; however, a significant amount of money is put aside for the plan and he wants to make sure that, if we do have a plan in place, that we proceed to spend the taxpayers’ money in the way they are being taxed for it and make certain the account is maintained and used in the way it was envisioned to work when it was created years ago.
Mr. Cornish acknowledged Mr. Farley’s reappointment to the board for another six years.
Mr. Bushka thanked Mayor Bingham for the opportunity to serve on the board.
Mayor Bingham said the Vehicle Replacement Plan should be reviewed, in terms of vehicle usage, placement, and maintenance, and the graphs should be updated in terms of costs and depreciation. This matter was top priority for him. He would ask Mike Michaud to give the board a presentation of the Vehicle Replacement Plan during the next Board of Finance meeting.
Mayor Bingham thought it might be a good idea to set up a committee made up of Council members and Board of Finance members to go over the budget in more detail than it has been done in the past. He asked for volunteers from this board.
ADJOURNMENT #3010
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to adjourn at 5:23 p.m.
ATTEST: JOLINE LeBLANC
ASST. CITY CLERK
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